DHAAR MEHAK M & TABEEN J WALI
The global ecommerce market was expected to be worth a total of $5.7 trillion by the end of 2022. That figure is estimated to grow over the next few years; exhibiting the fact that borderless e-commerce is becoming a profitable option for online retailers. It is giving a market space to one and all with a potential or product to sell. Only two years ago, 17.8% of sales globally were made from online purchases. That number is again expected to reach 20.8% by the end of 2023; a 2 percentage point increase in ecommerce market share! This growth is expected to continue, reaching 23% by 2025, translating to an increase of05.2 percentage points in just five years.
Economic projections and forecast predict the global retail sales growth to rise even further and to take up more retail market share. According to research completed by eMarketer and Statista, online retail sales will reach $6.51trillion by 2023, with e-commerce website taking up 22.3% of total retail sales. Although retail has had it tough since 2020, every national market covered by eMarketer saw double-digit ecommerce growth. The trend continues globally: Latin America (including Peru, Brazil, Argentina, Chile, Colombia, and Mexico) saw $104 billion in ecommerce sales in 2022, up 22.4% from $85 billion in 2021.The UK is forecast to continuously increase by $85.7 billion (+42.88%) within the next years.
China continues to lead the global ecommerce market, accounting for 46.3% of all retail ecommerce sales worldwide, with total online sales just over the $2.8 trillion mark in 2022. It also has the world’s most digital buyers, 842.1 million, representing 39.4% of the global total. The US ecommerce market is forecasted to reach more than $904.9 billion in 2022, a little over a third of China’s. After China and the US, the third-largest ecommerce market is the United Kingdom, taking up 4.8% of the retail ecommerce sales share. The UK is followed by Japan (3%) and South Korea (2.5%).The top five ecommerce markets haven’t changed since 2018. Trends from eMarketer suggest that these markets will stay in the top five until 2025.
While the whole world has been witnessing the structural transformation and shift in terms of market transformations from retailing to online shopping, the Indian economy has been a part to the process. In light of the same, the Jammu and Kashmir (J&K, henceforth) economy has had an equal and equally growing participation in the same. The advent of the internet and the arrival of e-commerce technology in the lives of average Kashmiri’s have changed the shopping preferences and experience of the locals. People no longer have to battle issues like vehicular traffic on the roads or wait in queues for long hours. Accredited to the growth of the ecommerce technology, locals have been empowered to shop anywhere-anytime just at the click of a button.
However, in the recent past, there was no (or very limited) concept of e-commerce in Kashmir. Smartphone availability to the general public was rare. The masses were barely aware about the internet facilities and global communication channels. There was no idea of online shopping, online transactions, etc. With time and the availability of the internet along with the growing mobile phone penetration, e-commerce made its presence felt in the valley. However due to the slower internet connection issues like 2G and lack of awareness, people initially had apprehensions and thus were afraid of buying things online.
Tracing the roots and history of online shopping awareness in J&K, it dates back to the year 2008 when the Jio-Internet was making its headway into the valley. People were gaining affordable and available access to wireless internet. It was around the same time that after bearing a lot of hardships with sorting out the supply chains Flipkart became operational and functional in the region. The initial years were tough and hard but the company stood steadfast. It took some time for Flipkart to cut through lots of hurdles alone and get to success. Being the only player in the online market in the region for quite some time it was a big deal to keep surviving and floating. But the outcomes were a success.
Steadily as people gained access to quality internet services and advanced smartphone technology the word spread. It was observed that the door-step delivery was actually a reality. At the same time, the quality of the delivery matched the promises of the website. The trust factor got built. Witnessing optimism within the J&K market, other companies like Amazon, Snap Deal, eBay, and other local online stores, etc., started jumping in to tap into the growing ecommerce market. The consumers got the opportunity of choosing from a wide range of products. Not only that, discounts and sales from time to time offer big benefits to the consumers.
All these factors have been contributing towards a structural market shift. People from across the J&K have been moving from in-person retail shopping to online shopping. While the consumers in the region have surely benefitted both in terms of utility/satisfaction and profit maximization, the retailers have been losing.
The J&K economy is pre-dominantly characterized as a consumer economy. The characteristics of being a producer and self-sufficient economy have been limited and rather absent for a long time. It is the retailer of J&K who has been at the losing end on account of the growth of the online markets. Retailing has been one of the most common business ventures of people across the region of J&K. Setting up of the shop(s) selling various diverse items has been a known venture. People for generations have been relying on this activity. Lately the structural change is challenging this segment of J&K businessmen and the immediate solution visible is evolution. These businessmen/retailers need to adjust to the changing market and make themselves competitive enough to compete with the global online sellers. The only other option is to let the business suffer, deteriorate and shut down.
(The authors are affiliated to the Department of Economics, Islamic University of Science and Technology & can be reached at [email protected] and [email protected])
